Policy Tools
An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to manage the agricultural industry as one part of the various methods a government uses in a mixed economy. The conditions for payment and the reasons for the individual specific subsidies varies with farm product, size of farm, nature of ownership, and country among other factors. Enriching peanut farmers for political purposes, keeping the price of a staple low to keep the poor from rebelling, stabilizing the production of a crop to avoid famine years, encouraging diversification and many other purposes have been suggested as the reason for specific subsidies.
Price floors or price ceilings set a minimum or maximum price for a product. Price controls encourage more production by a price floor or less production by a price ceiling. A government can erect trade barriers to limit the quantity of goods imported (in the case of a Quota Share) or enact tariffs to raise the domestic price of imported products. These barriers give preference to domestic producers.
Read more about this topic: Agricultural Policy
Famous quotes containing the words policy and/or tools:
“While I am in favor of the Government promptly enforcing the laws for the present, defending the forts and collecting the revenue, I am not in favor of a war policy with a view to the conquest of any of the slave States; except such as are needed to give us a good boundary. If Maryland attempts to go off, suppress her in order to save the Potomac and the District of Columbia. Cut a piece off of western Virginia and keep Missouri and all the Territories.”
—Rutherford Birchard Hayes (1822–1893)
“There is a great satisfaction in building good tools for other people to use.”
—Freeman Dyson (b. 1923)